TOP INTEGRATED CIRCUITS LTD

Executive Summary

Top Integrated Circuits Ltd is an early-stage company with significant negative equity and heavily reliant on related party debt financing, indicating poor financial health and high credit risk. The company’s limited liquidity and lack of profitability data constrain its ability to service debt independently. Credit approval is not recommended without substantial parent support or operational improvements.

TOP INTEGRATED CIRCUITS LTD - Analysis Report

Company Number: 14976279

Analysis Date: 2025-07-29 15:53 UTC

1. Credit Opinion: DECLINE
   Top Integrated Circuits Ltd exhibits significant financial distress with extremely high current liabilities (£5.99 million) far exceeding current assets (£77k), producing a negative net working capital of approximately £5.92 million. The company is reliant on substantial financial support from its parent company Gongyan Tuoxin (Suzhou) Integrated Circuits Ltd, as evidenced by the £5.43 million owed to this related party. Its shareholders’ funds are deeply negative (-£5.92 million), indicating insolvency on a balance sheet basis. Given the company's short trading history (incorporated in July 2023) and the absence of profitability data (income statement not filed), the credit risk is elevated. Without clear evidence of operational cash generation or external funding beyond the parent company, the ability to meet debt obligations is highly uncertain.

2. Financial Strength:
   The balance sheet shows very weak financial health. Fixed assets are minimal (£5,264) relative to liabilities. Current liabilities have increased significantly over the last reported period, and working capital is severely negative. The company is effectively insolvent with negative equity, entirely funded by a related party loan from the parent. The absence of an income statement and the filing of total exemption full accounts limit insight into profitability or operational performance. The company’s going concern status depends wholly on continued financial support from the parent, which is a risk factor.

3. Cash Flow Assessment:
   Cash at bank is very low (£6,219), indicating very limited liquidity to cover near-term obligations. Debtors represent the bulk of current assets but may not be readily convertible to cash. The large creditor balance owed to the parent company suggests that external creditor exposure is minimal, but the company relies on internal financing rather than generating free cash flow. Given the negative net current assets, the company is likely experiencing cash flow constraints, raising concerns about its ability to service any new credit facilities independently.

4. Monitoring Points:

• Monitor the company's cash flow generation and debtor collection efficiency to assess liquidity improvements.
• Track changes in the related party loan balance and any equity injections from the parent company.
• Review future filed accounts for income statement data to evaluate profitability trends and operational viability.
• Watch for any changes in director or ownership structure that could impact financial support.
• Monitor compliance with filing deadlines and any signs of financial restructuring or distress.